Lahore, Pakistan — Pakistan is missing its revenue targets for the current fiscal year, exposing persistent weaknesses in the Federal Board of Revenue (FBR) and the country’s broader tax framework. Early first-quarter data for FY 2025-26 show a shortfall of roughly Rs200 billion, underscoring gaps and outdated practices that hamper collections, The Express Tribune reported.
The government had budgeted for 20.3% annual revenue growth, but the FBR’s collections so far reflect only about 12.5% growth, widening the gap between expectations and reality. Business groups say the shortfall points to policy and structural failures: the system leans on higher levies for existing registered taxpayers instead of bringing more people and businesses into the formal tax net.
Syed Mahmood Ghaznavi, chairman of the Pakistan Industrial and Traders Association Front (PIAF), warned policymakers that time is running out to overhaul the tax model. He cautioned that repeatedly taxing already-compliant firms will not sustain public finances and urged closing major structural holes while expanding the tax base.
Industry representatives have called for measures to incentivize informal-sector participation rather than resorting to coercive collection tactics. They criticized the FBR’s dependence on fragmented and outdated data, which they say leads to uneven enforcement and unfair assessments. Textile exporter Kamran Aslam urged a move to digital, data-driven systems, noting Pakistan’s tax-to-GDP ratio remains one of the lowest in the region because bold integration measures have been avoided.
Business lobbies proposed a simpler fixed-tax regime at lower rates to boost voluntary compliance. They also warned that meeting the International Monetary Fund’s demands for fiscal tightening without meaningful domestic reforms could further constrain growth. Many see the revenue gap not only as a fiscal shortfall but as evidence of state institutions resistant to modernization.
(This report is based on a syndicated feed and is published as received.)
